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SAP Hires Head of New Business Unit Focused on SMEs

SAP has appointed Hans-Peter Klaey as president of a new business unit that will pull SAP's global and regional resources together to better target small and midsize enterprises.

SAP has a big goal: Nearly triple its customer base over the next four years.

The company plans to grow its current 30,000-plus customer roster to 100,000, by 2010. One way it plans to do that is by gaining more customers in the SME (small and midsize enterprise) sector, and in turn build out its partner channel to reach more customers.

To better reach its goal, SAP announced Nov. 13 that it has appointed Hans-Peter Klaey as president of a new business unit—Global SME—to oversee sales, marketing and operations.

Currently, 31 percent of SAPs order entries come from the SME market, according to Klaey. His goal is to increase that to 40 to 45 percent to reach SAPs 100,000 mark.

Klaey, based at the companys Walldorf, Germany headquarters, is currently the president and CEO of SAP Asia Pacific, a job hes held since 2002. Prior to that, the Swiss native was the managing director of SAP U.K. Limited, overseeing operations in the U.K., Ireland and Africa.

The goal for Klaey moving forward—he assumes his new role Jan. 1, 2007—is to give the SME business a much greater focus by pulling all of SAPs global and regional resources together.

"When we looked at what needs to be fixed, we didnt find anything. We just need a bigger focus in the organization, to align all the global and regional resources into one line of business," said Klaey.

While it doesnt break out the numbers of internal sales professionals versus partners, SAP has a multichannel approach to selling into the SME market.

Internal and partner sales teams under Klaeys aegis will focus on selling the companys All-In-One software (aimed at the 100 to 300-seat customer), while SAP will look to external partners to micro verticalize the All-In-One suite.

Both channels fit SAPs approach to the SME market, which is to offer very targeted software to specific industries.

To this end, the All-in-One suite is based on the MySAP Business Suite of software and brings into play SAP Best Practices—predefined business processes and industry best practices that can be configured for a specific vertical market.

The best practices approach is key.

"SME is a space that is underserved, yet it has a ton of local and global competitors," said Klaey. "What is missing is global best practices."

With the latest edition of its All-In-One ERP package, SAP has pre-packaged software based on a number of different vertical markets. Its also made it easier for partners to create industry-specific software faster through the creation of regional Solution Centers.

To better focus its partner initiatives in the SME market, SAP announced last month an expanded partner program, SAP PartnerEdge, to help bring together those partners that resell, build, implement or provide services for All-In-One, and also for SAP Business One, which is geared toward the upper midmarket, or divisions of large organizations.

SAP plans to build out the PartnerEdge program to include Enterprise focused partners, over the next 12 to 18 months.

Klaey plans to take all those moving parts—the direct and indirect sales channels, PartnerEdge, and other SME resources—and pull them together to form a more cohesive offering.

He plans to collaborate with global and regional management and sales groups to accelerate SAPs SME efforts, company officials said.

"The creation of a dedicated line of business to focus our worldwide activities and align our multiple go-to-market channels is a pivotal next step in realizing our SME growth ambitions," said Leo Apotheker, president of customer solutions and operations and a member of the SAP Executive Board, in a statement.

Klaey, who will report to Apotheker, has his work cut out for him. As enterprise software sales slow—theres only so many Fortune 1,000 companies—SAPs biggest competitor, Oracle, is also looking to tap the SME market to boost sales.

And its taking a vertical approach as well, buying companies in heavily contested vertical markets like retail to try and best SAP. At the same time, Microsoft, arguably the biggest presence in a SME business sector with its desktop applications, also focuses on the midmarket.

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